Trump Administration has approved a loan of 53.3 million barrels from the US Strategic Oil Reserve
The United States will provide a loan of 53.3 million barrels of crude oil to energy companies in an effort to stabilize global markets in light of escalating tensions.
The administration of US President Donald Trump has revealed plans to loan 53.3 million barrels of crude oil from the United States Strategic Petroleum Reserve (SPR) to energy companies, as part of an international initiative designed to alleviate tensions in global oil markets.
The decision is made in response to rising oil prices caused by the ongoing US-Israeli conflict with Iran and disruptions associated with the Strait of Hormuz, a vital global shipping route that typically sees about 20 percent of the world’s daily oil supply flow through it.
The US Department of Energy (DOE) reports that nine companies, including Exxon Mobil, Trafigura, and Marathon Petroleum Company, took part in the programme. They collectively borrowed approximately 58 percent of the 92.5 million barrels that the government had initially made available from the reserve last month.
The most recent release is a component of a wider strategy by the DOE, which had previously loaned around 80 million barrels earlier this spring as Washington aims to release a total of 172 million barrels from the reserve.
The action is in accordance with a March agreement made between the United States and over 30 member countries of the International Energy Agency to jointly release approximately 400 million barrels of oil from strategic reserves globally.
The coordinated intervention aimed to alleviate the increasing pressure on global energy prices after Iran’s closure of the Strait of Hormuz amid the intensifying regional conflict.
IEA Executive Director Fatih Birol characterized the situation as the “biggest-ever energy crisis,” cautioning that further supply disruptions could lead to additional emergency releases from strategic reserves.
In remarks made earlier this month, Birol indicated that IEA member countries had thus far released approximately 20 percent of their available reserves and were ready to take further action if needed.
The increase in energy prices has emerged as a significant political issue in the United States as the November midterm elections approach, with Republicans aiming to preserve their narrow majorities in Congress. Increasing fuel prices may influence voter opinions as Americans contend with the challenges of inflation.
According to data from AAA, the average gasoline prices in the US rose to $4.52 per gallon on Monday, marking the highest level observed since 2022.
Under the DOE arrangement, companies that borrow crude oil from the SPR are required to repay the loans in crude, along with premiums of up to 24 percent. Officials indicate that the mechanism aims to stabilize energy markets while avoiding extra costs for American taxpayers.
The Strategic Petroleum Reserve, located in underground caverns at four sites along the coasts of Texas and Louisiana, currently contains approximately 384 million barrels of crude oil — a quantity that represents less than four days of global oil consumption.
